As a CRNA you’ve gone through a multitude of different financial phases throughout your lifetime; saving for your education, paying back your student loans, then enjoying your income while saving, planning and investing for retirement. There are plenty of resources available to help guide you through these various stages. However, as you make the transition into retirement, your circumstances change dramatically as it becomes time to start distributing your hard-earned nest egg.
This stage is known as decumulation. How you handle your withdrawal period is just as important as anything you do during your accumulation years since you no longer have the opportunity to grow or replenish your savings. As you can probably guess, the primary concern that we hear from CRNAs is that they don’t want to outlive their money. How will you survive life’s ups and downs without the steady CRNA income on which you’ve come to rely? We'd like to share five things that will help you have the best chance for success during your decumulation years.
- What’s the first step? It’s making sure you have the proper support. There are many factors that you need to consider when it comes to planning in retirement. Is the person with whom you’re working, whether it be a friend, family member, accountant or advisor, experienced with how all the different financial puzzle pieces work together? The key to solving your retirement puzzle is to find a knowledgeable advisor who understands how each choice you make will affect the various aspects of your retirement. Not everyone is familiar with this type of planning, and there are many things that can easily be overlooked.
- The second thing to know about decumulation is that the fear of spending is very real. We have many CRNAs who aren’t comfortable spending the money that they’ve spent decades saving. They are terrified that they will deplete their savings and need reassurance from us that their financial plan is well-built.
- Something else to consider – all the factors that could put your retirement in jeopardy... Risk doesn’t disappear once you’ve built your nest egg and transitioned out of work. Life events, pandemics, inflation, stock market volatility, and so much more can wreak havoc on your retirement plans. That’s why we take all of these scenarios (and more) into account when building financial plans and decumulation strategies for our clients. We test financial plans with thousands of scenarios to make sure they can withstand whatever the future may bring.
- Another huge piece of this planning conversation is taxes. Right now, we’re in a historically low tax environment. Most experts agree that tax rates will increase as our national debt rises and medical costs surge. Your retirement years might be the time when taxes will impact you the most. It is important to plan and consider your savings options both pre and post retirement to help limit your tax obligations later in life.
- And finally, replacing your CRNA paycheck with an income stream in retirement is the last thing to know. What steps are you taking to generate your needed income? Whatever your desired lifestyle, you’ll want to ensure that your retirement income can sustainably cover all of the expenses. Plus there’s the longevity side of the discussion. Typically we’ll project out to age 90 when we first meet a client. Then we look at the longevity in their family and get a better idea with what they’d be comfortable. All of this helps us determine the amount of money needed in retirement.
These are just a few of the pieces vital to your success in retirement. Whether you are a few years away or are already in the decumulation phase, make sure you’re getting the help you need from someone who understands how to make all your puzzle pieces work together.
If you want to learn more about your financial plan, connect with us at CRNA Financial Planning.
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With decades of experience working exclusively with CRNAs, CRNA Financial Planning® has the knowledge to help you save more of your hard earned money and determine appropriate decumulation strategies. Schedule a free introductory phone call to discuss your current situation and needs. You can also call our office at 855.304.3748 or email us at inquiry@crnafinancialplanning.com.
* Occupational Employment and Wages, May 2020; 29-1151 Nurse Anesthetists. https://www.bls.gov/oes/current/oes291151.htm
The opinions voiced in this material are for general information only and are not intended to provide specific financial or tax advice or recommendations for any individual. Investment Advice offered through Private Advisor Group LLC, a Registered Investment Advisor.